Cryptos fall; Bitcoin below $26,000 ahead of Fed meeting

Cryptos fall moderately. Bitcoin (BTC) has retreated 0.7% in the last 24 hours and stands at around $25,900, while Ethereum (ETH) follows in the footsteps of the crypto queen and drops to $1,740.

"Bitcoin continues to hold its ground against the massive bearish battle that has been put on by the BTC bears. Traders are now focused on the Fed’s next policy move, and they believe that the price could experience some relief rally as the dollar index may take a nose dive as the Fed leaves the interest rate where it is," explained Naeem Aslam, chief investment officer at Zaye Capital Markets. According to the expert, "one or more inflation readings like yesterday, the dollar index is more likely to crash, which could benefit the BTC price."

In this regard, the Fed's latest monetary policy decision will be revealed today, on Wednesday, and this will give way to the European Central Bank (ECB) and Bank of Japan (BOJ) meetings on Thursday and Friday, respectively. The consensus seems to be clear that the US central bank will leave rates at their current level, although most analysts also caution that the hiking cycle has not come to an end yet.

"Whatever pause we might see this week will come with a hawkish accompanying statement, and a threat that the Fed could resume its rate hikes next meeting," noted Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Others, such as Edward Moya, senior analyst at OANDA, believe that the May inflation data in the U.S. "is fueling this bull market." "Wall Street is becoming a little bit hopeful here that an FOMC June skip could eventually become a July pause. Bitcoin remains stable around the $26,000 level as investors consider reducing altcoin exposure and increasing Bitcoin holdings,” the expert added.

Meanwhile, Aslam believes that traders are also keeping a close eye on the BTC’s correlation with riskier assets, and this is because if the Fed pauses interest rates, "traders are likely to become bolder in backing more risk, which should help the BTC price."

Meanwhile, the market continues to digest the effects of the Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase. The latest reports suggest that the regulator and Binance's U.S. subsidiary will negotiate a settlement to avoid freezing all of the platform's assets. Binance CEO Changpeng Zhao also denied having sold Bitcoin with the aim of inflating the price of BNB, Binance's native token.

In the rest of the market, there have been falls among the main altcoins. Slight rallies in Tron (TRX) and Polygon (MATIC) stand out.